The mobile telecommunication industry in South Africa is among the highest profit generating sectors and also the fastest growing. The telecommunication sector in South Africa has found itself in a rather classic condition since the launch of MTN and Vodacom mobile networks in the country over two decades ago. The evolution of the sector has been attributed to exponential growths, fierce competitions, regulatory framework and cutting edge technology. However, South Africans are now peering out at some new cycle possibilities for the telecom operators, including MTN, Vodacom, Cell C and Telkom.
What the Future Reserves For South Africa’s Mobile Industry
Determining how the mobile industry of South Africa will unfold is subject to several factors such as competitive, technological and regulatory factors.
The fixed line operator in South Africa, Telkom had a somewhat low penetration levels into the market. This ignited the need for advanced mobile services and as such acted as a catalyst to speed up the mobile growth. The mobile operators as a result benefited much from the rapid growth of consumers and the adoption of corporate mobile telecommunications.
By the mid-2015, the penetration of SIM card into the mobile industry of the country was more than 150%. This was attributed to the popularity of using multiple cards mostly preferred by South Africans for business and personal use. Much of the population also use multiple SIM cards for the purposes of having different subscriptions for broadband services and voice. This trend became even more popular with the introduction of the 3G and the LTE services. As a result, the SMS platform is facing a stiff competition by the growth of WhatsApp and the improvement of internet access services.
As the major mobile service providers continue to lead the telecom industry in the country, some have also extended into offering fixed services, borderless fibre connectivity, fibre backbone connectivity, mobile banking as well as entertainment. These services are rapidly becoming competitive. The fixed line operator Telkom reacted to the advancements by other networks’ market dynamics though launching their own mobile network. This simply resolves to the fact that network operators are being forced to come up with innovative ideas to distinguish themselves from the raging competition so as to retain their customers and acquire more.
Some of the key developments by mobile network operators to curb the rising competition include leading operators such as MTN offering data rates of up to 200Mb/s with their trials of LTE-Unlicensed. Vodacom on the other side ends the M-Pesa services in the country. Cell C on its side didn’t want to be left trailing in the competitions and hence launched their commercial LTE-A service.
In general, the mobile sector has attributed to a greater percentage of the growth of mobile industry in South Africa. The penetration rate of the mobile networks grew to more than 105% as of the year ending 2010 with a total of 51.6% subscribers. On the other hand, the fixed-line network accounted for less than 7% of the market growth. Telkom had monopolised the fixed-line networks for long but was losing on their end until they decided to launch their own mobile networks. The mobile industry of South Africa is rapidly changing to the better due to the stiffening competition from other mobile network service providers.